Autonomous delivery startup Nuro lays off 20% of workforce – TechCrunch

Nuro, the self-driving vehicle delivery startup backed by Softbank, Google and Tiger Global Management, is laying off about 300 people, or 20% of its workforce in an effort to preserve cash amid a stormy economic outlook, according to an email sent to employees this morning.

Several Nuro employees also posted on Twitter and LinkedIn this morning that they had been affected by the layoffs.

In the email seen by TechCrunch, the co-founders Jiajun Zhu and Dave Ferguson informed employees that they would receive an update later this morning to let them know if they are affected by this layoff and with information on next steps.

The co-founders said they take responsibility for the layoffs, which were the result of overhiring in 2021 that hit financial hurdles in 2022.

Each and every one of you has made important contributions to this company, and saying goodbye to the talented Nurons is not a decision we have made lightly. For those of you leaving Nuro, we are very sorry about this outcome – this is not the experience we wanted to create for you. We made this call and take full responsibility for today’s circumstances.

Ferguson and Zhu wrote that in 2021 they were the “strongest fundraising environments ever.” “We saw an abundant supply of capital for deep tech companies and almost all companies were aggressively hiring and expanding,” they wrote, adding that “In that environment, we determined that it made sense to invest heavily across the board and grow our team quickly.”

Exactly one year ago, Nuro raised $600 million in a fundraising round led by new investor Tiger Global Management. The Series D round, which raised its valuation to around $8.6 billion, attracted high-profile investors including Baillie Gifford, Fidelity Management & Research Company, Google, China-based venture firm Gaorong Capital, the grocery retailer Kroger, SoftBank Vision Fund 1, funds and accounts advised by T. Rowe Price Associates, Inc. and Woven Capital, a venture arm of Woven Planet, a Toyota subsidiary.

That led the company to double the size of its team in less than two years and significantly increased operating expenses based on the assumption that the financing environment would remain strong. “This was a mistake,” they wrote.

Macroeconomic conditions in 2022, which included inflation and a looming US recession, prompted the founders to cut costs, including reducing their workforce in an effort to extend their capital runway through 2025.

Nuro still has more than $1 billion on his balance sheet, the couple wrote.

Laid-off workers are offered 12 weeks of severance pay and up to 14 weeks for those who have been with the company for more than two years. The company will also pay bonuses to those who are eligible, and is waiving the one-year cliffhanger on the capital front. Nuro will subsidize 100% of COBRA healthcare premiums (including families) through March 31, 2023 will provide career transition support and visa holders will also receive some notice period to ease this transition and, if applicable, travel assistance, the email said.

While the company has made progress and is operating in Houston, Palo Alto and Mountain View, California, it has also retired operations in at least one area. The company closed its Phoenix facility this summer as it shifted its business strategy away from the desert metropolis and toward the San Francisco Bay Area and Houston.

Leave a Comment